Bridging the GAP: Optimization Strategy for Affiliate Marketers

October 1, 2015

The art of optimization is a combination of things: one part gut feeling, one part data, and an overall familiarity with how your campaign tends to fluctuate. As an RTX Platform Account Manager, I see firsthand how advertisers struggle to optimize their affiliate marketing campaigns, often times neglecting to optimize at all. In this post, I’ll explain what optimization is, why you need it, and how to get started.

Optimization Explained

Simply put, optimizing is the strategy you use to make your campaigns as profitable as possible. All campaigns have a goal, whether it’s a lead, sale, or page view. When someone completes your offer’s goal, you make a profit. This is called conversion. Of course, promoting your offer isn’t free, so you can only profit if you’re paying less to run your campaign than you’re being paid for those conversions.

Tracking Your Data

To measure (and optimize) your campaign’s success, you need to be tracking the right data from day one. That means tracking what you’re getting paid for (i.e., your conversion point) and ensuring that you’re paying less than you’re being paid for those conversions. With RTX Platform, you can install a conversion pixel to track this data. You’ll also want to track more granular data, like the keyword or target that lead to a conversion, by appending tracking macros to your landing page’s URL.

Bidding Off the Bat

Now let’s talk bidding. Your bids determine the cost of your campaign, and in some cases, you may need to bid competitively on targets that convert well for you, the SmartBid is a great way to reach competitive prices when you are first starting a campaign.For RTX Platform advertisers running CPV campaigns, knowing the difference between proxy bids and fixed bids is a must. I always suggest going with the Proxy Bids as often as possible so you can increase your buying power.

Strategizing Optimization

After you have the campaign setup and tracking with proxy bids for at least 24 hours, you can start to optimize. There are three major parts to optimizing, which I like to call “Bridging the GAP”

Goals

Allowable cost per view (CPV)/cost per click (CPC)

Pause!

Goals: Know what they are.

Defining your goals are essential for success. What are you getting paid for each conversion, and what percent do you need to make on that conversion to feel comfortable with your profit? If your payout is $36, and you want a 20% margin on each conversion (i.e., a $6 profit per conversion), you should aim for a $30 goal cost per lead (CPL). This way, you’re spending $30 for each conversion, but getting paid $36.

Allowable CPC/CPC: Know the formula.

The Allowable CPV/CPC is a formula to live by. The math is simple: (number of leads multiplied by conversion value)/impressions (for CPV campaigns) or clicks (for CPC campaigns).

For any converting target, you need to follow this formula to continue to receive traffic at or below your ideal CPL, as it tells you EXACTLY how much you can pay per view or click to continue to convert at or under your goal. This helps you set the smartest bid for each target.

Pause: Know when to do it.

You’ll probably find targets in every campaign that just don’t work out, and that’s okay! This is when you’ll want to Pause. Pausing targets keeps you from spending money needlessly, but it’s important to know when to pause targets, and which targets to pause.

Sometimes, a target can have bad days. Other times, you’ll have targets converting with a bit more spend than ideal, but they have the potential to be more profitable in the long run. When testing a new target, I suggest you never spend more than your goal CPL just to see if it converts.

Let’s go back to my earlier example. To refresh: Your offer pays $36 per conversion, and you want a 20% ($6 per conversion) profit from each, so you want to spend $30 for each conversion. In this case, I’d test all my targets until they each spend $36, then pause any that didn’t convert. This way, you’re breaking even on the targets you pause.

At this point, you may be wondering, “Wait, how can I make my $6 profit when I’m breaking even?”. The trick is to blend these targets in, because they’re still valuable as long as they’re within the 20% margin of your ideal CPL. That being said, if you have a target converting with a conversion rate (cost/conversion) of 5% at a CPL of $36, you want another target to be converting at the same rate of 5% at a $24 CPL to average out a $30 CPL for the campaign.

Analyzing Data

Optimizing is an ongoing, data-driven strategy. When optimizing, you want to make sure you’re looking at the most reasonable and usable data, whether on the first day or months down the road.

If the campaign started less than 30 days ago, you should look at all data from day one. Otherwise, for the first half of the month, look at the last 30 days of data, then look at your month-to-date (MTD) data for the last half of the month. This way, you’re always looking at the most valuable rolling data.

Affiliate marketers who don’t optimize are often quick to give up on a campaign that doesn’t profit. But if yours is set up well and tracking from the start, you’ll be able to “Bridge the GAP” every day. It could mean the difference between a positive campaign and a negative campaign.